TRIN Index and Trend Continuation

Monday 23 October 2006

TRIN Index and Trend Continuation

Trend continuation today. The Emini closed up 5.75 points at 1,380.75 on Monday. The Trading Index (TRIN) oscillator signal we got on Friday worked out well today. Want to know more about this useful indicator?

Don’t fight the Emini trend

The Emini opened down 3.5 points at 1,371.50 and dropped briefly to 1,370.00. It then spent the rest of the day rallying, reaching a high of 1,384.50 and eventually closed at 1,380.75. Range ways high at 14.5 points and volume was above average at 1.2 million contracts.

Trend continuation today as this market powered still higher. We ended last week with a mixed bag of signals – some bullish, some bearish. But the lesson here is “don’t fight the trend” and “the trend always lasts longer than you think it will”. I'm sure at some point this market will top out and reverse but obviously today was not the day.

Crazy Emini spike overnight

Lot of talk this morning about the spike in the Emini overnight. You can't see it on a daily chart, but after the weekly open late Sunday afternoon the Emini spiked up from 1,375 to 1,398 on low volume. Obviously there were a series of stops in Globex above 1,380 that got triggered in a cascading pattern – all the way up to 1,398. Ouch!

Trading Index oscillator ahead of the pack

In previous posts I’ve talked a lot about how I use the Trading Index (TRIN) data. The chart above shows a useful TRIN oscillator that has been catching swings in this market over the last two or three months quite accurately. As usual, red dots are bullish and white dots are bearish.

Last Thursday all my trend indicators dropped into the buy zone and then this Trading Index oscillator gave a long signal on Friday. Well today, the other trend oscillators have turned and followed the Trading Index up.

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